An unequal crisis

How the cost of living crisis has been felt by some groups more than others

Britain is facing its biggest cost of living catastrophe in decades. Because of this, we’re seeing more people not having enough money to make ends meet than ever before. Throughout 2022, over 424,000 people accessed our debt or crisis support.

While many are feeling the pinch, people with certain protected characteristics are more likely to be in a financial crisis.

Some of the reasons for this include:

• An increase in the cost of living has hit the poorest households the hardest. This is because they are less likely to have money put away for a rainy day. And, certain people are more likely to be poor due to structural inequalities. This includes racially minoritised communities, for example people of Bangladeshi and Pakistani heritage, single parents, who are predominantly women, and disabled people.
• Some groups have been more affected by real terms cuts to benefits or public services over the past decade. This includes disabled people and families with more than 2 children.
• Some people are less able than others to increase their hours of paid work i.e. people with caring responsibilities.
• The unequal impacts of inflation means that some groups are more likely to take the brunt of the economic crisis. The latest consumer price inflation data shows that food prices accounted for some of the largest increases in household costs over the past year. Not only does this cause additional strain for people, whose food bills take up a larger proportion of their overall budget, but people on lower incomes in urban areas may be paying disproportionately more.

At Citizens Advice, we take a social justice approach to all the work that we do. We can’t understand the issues people come to us for support with, without recognising the systemic barriers experienced by marginalised groups. But we need to do more than recognise structural disadvantages. The only way of affecting real change is to challenge these. This is an essential part of our advocacy function which seeks to improve client outcomes in the long term.

Our front line data shows that the cost of living crisis is increasing and reinforcing existing inequalities in society. We have started to explore the demographic trends in crisis support, energy problems and debt in the cost-of-living dashboard.

We have already shown that people from racially minoritised communities are more likely than white people to have a negative budget. This means that they have more essential spending going out than they have income coming in. This is also true for people with long term disabilities or health conditions, compared to those without. We can also see that women are more likely than men to access foodbank support.

In this new series, we will be exploring some of these trends in more detail. For example, we will be looking at how the cost of living crisis has affected racially minoritised communities — including people from Gypsy, Roma and Traveller groups. We’ll also showcase emerging trends, such as the number of disabled people and people with long term health conditions forced onto pre-payment meters.

As well as highlighting what we are seeing, we also want to spend some time thinking about the why. This is essential for us to be able to better understand the reality of different people’s lives and push for change.